Component breakout is the process of identifying and acquiring weapons systems components directly from the component manufacturer, and providing those components as government furnished equipment to a prime contractor for integration into an end item. This thesis was undertaken to examine and analyze current policy and guidance governing the component breakout program as it is currently structured within the DOD. Issues related to the adequacy and standardization of component breakout policy and guidance were addressed, and an overview of the component breakout decision making process was provided. Emphasis was placed on the current priority being placed on component breakout by the audit community. The research method consisted of an extensive literature review, a comprehensive analysis of written DOD (and individual Service) policy and guidance, and personal interviews of senior DOD acquisition personnel. It was found that: (1) there is adequate DOD level guidance on the component breakout program; (2) qualitative factors are not adequately considered in the component breakout decision making process; (3) administrative requirements of the DFARS regulation on component breakout are generally disregarded by acquisition managers; (4) the audit community perceives the existence of a serious compliance problem with the component breakout program; and (5) Program Managers (and their chain of command), rather than the audit community, are the more appropriate authority to make judgments in favor of component breakout.
Smith, Raymond W.
Naval Postgraduate School (U.S.)
Naval Postgraduate School
M.S. in Management
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